One80 Grand Mega-Buy is a Recapitalization of the Asset
Harvest made the decision to continue its part ownership of One80 Grand in a new joint venture with AXA because of the long-term growth prospects for downtown Oakland and Uptown in particular.
OAKLAND, CA—A recent acquisition represents a recapitalization of a 15-story LEED Platinum building, which was originally acquired by Harvest Properties and investment firm KKR in 2017. Harvest, in a joint venture with AXA Investment Managers–Real Assets, acting on behalf of clients, has now (re)acquired One80 Grand, a 279,000-square-foot class-A office tower for an undisclosed amount, although GlobeSt.com learns the purchase price was approximately $175 million.
Located at the edge of Lake Merritt in the Uptown neighborhood, Harvest and AXA will continue to elevate the stature of the building within the market and meet the needs of its diverse tenant base. Identified near-term asset management initiatives include a complete elevator system overhaul, continuation of common area upgrades and the addition of a creative workplace environment on the seventh floor.
“We look forward to working with Harvest to serve the property’s strong tenant roster and further enhance the building’s competitive position in the Oakland market,” says Steve McCarthy, head of North America at AXA IM–Real Assets, the JV majority partner.
Harvest made the decision to continue its part ownership of One80 Grand in a new joint venture because of the long-term growth prospects for downtown Oakland and the Uptown District in particular, according to Harvest partner Kathryn Collins.
“Numerous demand drivers including thousands of new residential units and an exciting new social and amenity-rich infrastructure is helping to transform downtown Oakland into an exciting live/work/play environment and an affordable alternative to San Francisco,” says Collins. “As a result, Oakland’s leasing dynamics will continue to strengthen.”
The East Bay Office real estate market remained strong during second quarter 2019, as rental rates pushed higher and occupancy rates dropped, according to a report by Kidder Mathews. The nine-year trend of higher rental rates appears to be continuing with more tenants seeking refuge from sky-high rates across the Bay Bridge in San Francisco, as Collins mentioned. The East Bay office market now has the 10th highest year-over-year rent growth in the nation.
Net absorption ended the second quarter in a strong position, with move-ins outstripping move-outs by more than 120,000 square feet. At the mid-point of 2019, all indications point to another strong year for East Bay office property, Kidder indicates.
“Oakland today is a fundamentally different place than at any time in the past: we’ve seen and experienced the rapid transformation into a 24/7/365 day urban environment,” Collins tells GlobeSt.com. “Oakland is now a destination of choice rather than a back-up option. We continue to see increasing diversity in the office tenant base as companies move to and expand within this market. A tremendous amount of quality housing stock is being delivered right downtown, as well as a burgeoning retail and restaurant sector. We are very excited about the long-term prospects of this market, so much so that we’ve recently relocated our own corporate headquarters to Oakland for all of these very reasons.”